By IFCMarkets
US stocks rose on Monday with S&P 500 and Dow Jones Industrial Average hitting new record highs. The S&P 500 closed at a record for the 50th time this year, the highest number of record closes in a year since 1995. The dollar strengthened against the basket of major currencies. While the economic data released on Monday were mixed, investors’ optimism was driven by Fed’s statement that it will be patient before raising interest rates. Sales of existing homes in November slowed down to the weakest pace in six months, while Chicago Fed national activity index came in stronger than expected. Today at 14:30 CET the Durable Goods Orders for November and the final figures for third quarter Gross Domestic Product will be published in US. The value of new purchase orders are expected to rise considerably, and the GDP is expected to be revised upwards. At 16:00 CET New Home Sales figures for November will be released, the tentative outlook is positive. The positive reports should contribute to further strengthening of the dollar against major currencies. European stocks rose Monday with technical, consumer services and financial stocks leading the advance. Asian equity markets closed mostly higher.
Today Asian commodity stocks are falling, dragging the regional index lower for the first time in four days. The yen fell for a fourth day against the dollar, as rising global stock markets reduce the demand for the safe haven asset. The ruble gained 3.1 percent against the dollar by 12:37 pm in Moscow yesterday after China signaled it is prepared to offer Russia support by expanding a currency swap between the two nations and making increased use of yuan for bilateral trade. China and Russia signed a three-year currency-swap line of 150 billion yuan ($24 billion) in October. Ruble was also supported by the announcement of Saudi Oil Minister that fossil fuel will remain the main source of energy for decades to come.
Oil advanced for the second time in three days as investors expect the Energy Information Administration’s report tomorrow will indicate a fall in stockpiles in the US for the second week. There is still an oversupply on global market as major producers don’t plan to cut output while global demand is falling. Iraq’s Oil Minister announced plans for the country to boost production to 4 million barrels a day next year, while the Saudi Oil Minister commented that prices as low as $20 a barrel are irrelevant to OPEC policy.
Gold futures fell below $1,200 an ounce Monday, with gold for February delivery falling 1.4%. Silver for March fell 2.1% . Both metals ended last week sharply lower, with gold declining 2.2% and silver losing 6%. With dollar getting stronger and rising global equity markets the demand for safe haven assets is expected to decrease. Copper prices declined for the second time in three sessions after purchases of previously owned US homes dropped more than forecast in November.
Russia plans to introduce export duties on cereals as it tries to stop the increase in the price of bread as the ruble slumped 40% against the dollar this year. A report from Rabobank International indicated that Russia has already shipped 15 million to 16 million metric tons of wheat out of the 22 million tons expected by the US Department of Agriculture for the season.
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